Freespee Finds: The Impact of Technology on the Automotive Brand/Dealership Relationship

Freespee Finds

Freespee Finds: The Impact of Technology on the Automotive Brand/Dealership Relationship

Find out the 4 main reasons why car brands are only 40% satisfied with their lead management.

Scroll down for the executive summary and full report.

Freespee Finds

Out of sight, out of mind: the issue with lead visibility.

  • Little visibility over how leads are managed thanks to diversity in retail operations.
  • Dealer and OEM often have different ideas of what a qualified lead looks like.
  • Data integration across different digital systems has never been so important.
  • OEM follow-ups mean stepping on dealership toes

Freespee Finds

Re-think the business model or improve the technology solutions supporting it?

  • Will direct selling become the dominant model and reduce the role of dealerships?
  • 5-6 car brands are already running pilot projects in direct selling
  • Data quality: technology isn’t the problem, it’s about process
  • Quality vs quantity: the challenge is early in the Marketing Funnel

Freespee Finds

Connecting different systems to map out the customer journey

  • Data is spread out and inconsistent because of technology or human error
  • Bringing offline and online touch points together in one single dataset
  • Ensuring frictionless customer experience, from online to the dealership

Freespee Finds

Middle of the road is never the best place to be: embracing the partnership is the best way forward

  • Greater integration of technologies used by OEMs and dealers
  • An integrated approach should be commercially favourable to both sides
  • Closing the loop on the entire journey removes friction and builds trust

“As ever, there is an inherent belief, within salespeople, that a centrally generated sales lead is not as good as the one that they have generated themselves. I strongly disagree, because if a customer’s gone to a website and said, ‘I’m interested in having a test drive in this car,’ it couldn’t be much better than that.”

Freespee finds: 1

Out of sight, out of mind: the issue with lead visibility

Lead visibility in the automotive space is still a grey area for car brands. It can be difficult to follow the lead trajectory the moment they are handed over to the dealership. According to AM Online, “from 200,000 customer records, dealers held incomplete information on 29%.”

However, it’s not necessarily always the dealership’s fault. They don’t have much say when it comes to what qualifies a lead for them.

We asked our automotive experts for their thoughts regarding this quandary and here is what we’ve learned.

“Car brands’ retail networks are very diverse. Dealerships range from the mom and pop to the small local hero retailer all the way through to the “big boys”, who are operating in 21
countries and make billions of profits.” 

With so many hands in the pot, it can be difficult to keep track of how every lead is managed across a franchise and/or dealer group network. Car brands have a say with lead qualification, but the journey outside the brand realm is still murky.

Meanwhile, consolidation is picking up speed with foreign dealer groups acquiring European franchises, bringing their own systems and processes to new markets: “Holding companies such as South Africa’s Imperial and Super Group have been buying showrooms across England. Penske, an American group, has become the largest dealer network in Europe by revenue,” says a recent The Economist article called “Car dealerships have become targets for cross-border investment”.

According to one car brand executive “there is an inherent belief, within salespeople, that a centrally generated sales lead is not as good as the one that they have generated themselves”. A qualified lead in any industry is a contentious issue, but in the auto space it’s often down to where the lead is originated.

It can be argued that both dealerships and OEMs consider a lead to be the moment someone books a test drive. “That couldn’t be much better than that. The usual practice is not to send through brochure requests or anything like that. The preferred method is to only send through test drive requests”.

“The bigger dealership groups are taking a bigger and bigger slice of the market. They have systems that they have invested in, therefore they won’t take very kindly for an automotive manufacturer to impose systems upon them.”

Follow-ups by the car brands after the dealership receives a lead is often disconnected. “In some cases, up to three months will elapse until a car brand calls a customer directly, not to sell them a car, but to find out how they found everything or even whether that lead was ever followed-up properly.”

This post-sale feedback loop should be as seamless as the buying journey itself, with dealerships being the first touch point to check customer satisfaction and the car brand, as the original source of that lead, then closing the loop to ensure that customer connects a great experience back to the brand values.

“When you have to chase for visibility, the process becomes time-consuming, expensive and full of friction.”

Additionally, it becomes a time-consuming and expensive exercise for brands to involve themselves in every stage of dealerships’ operations.

According to research by Think with Google, 95% of vehicle buyers use a digital source for information, which indicates a busier data highway for the automotive ecosystem.

“Because of the plethora of data management solutions and lead management solutions in the retailers, the secret going forward has to be the integration of data and the passage of data. So, it becomes less about the system, and more about data flows.”

Direct selling is a prevalent topic among automotive executives.

“Directly controlling all customer touch points, including new and existing sales channels, means being able to provide a consistent and integrated customer journey for the first time—across channels and markets,” states Accenture. Still, moving to a business model solely reliant on direct selling is further away than we think.

Some executives even argue that the future of how we buy cars could potentially reduce dealerships’ role to delivery handling and servicing, rather than a key part of the buying
journey.

“There are five or six manufacturers that have launched pilots, or some version of direct selling. Whether it’s truthfully an online sales experience or not depends on the brand involved. There are detailed plans, but they’re on the shelf at the moment while final issues are worked out.”

Maintaining data integrity is down to how data is captured and stored. With an array of systems being used across the dealership and group network, it can be hard for brands to gauge what is working and what is not.

“When the numbers generally aren’t satisfying, it’s a case of not knowing whether they’re actually performing above where they should be, below, or at about par…”

Reliable data is down to the source, and in the automotive space sources of data are multiple. The solution is a consistent flow of customer data throughout the brand’s networks.

“The data’s just so disparate that it’s hard to paint a single complete picture, so it’s challenging to have a concrete view either way – which means you end up just looking at
the raw data which, depending on your view of it, either is or isn’t good.”

The technology gap that exists in the automotive industry is more about a lack of better integration capabilities than technology per se. This involves updating multiple systems across a car brand’s dealer network to create a fully connected environment.

“The key question is much more about how the technology is used. It’s not a technology gap, it’s more a process gap or an enhancement of the existing technology.”

Enhancing existing technology seamlessly may mean moving to a hybrid system managed by both the car brand and dealer.

“If not direct selling, then options include moving to Salesforce sooner rather than later, to improve on lead management. It’s about sorting out the brand landscape and then there will be some degree of data integration between Salesforce Sales Cloud and dealers’ lead management systems.”

“Brands don’t think they need to justify marketing spend to dealers. They spend hundreds of millions each year on brand and lead generation campaigns, which ultimately generate
a great flow of leads to their dealership networks.”

The earliest point in the automotive marketing funnel is when a potential buyer starts researching, usually online. According to the Think with Google studio, one car buyer had 900 digital interactions in their path to purchase. Drawing them in with online advertising is the focus for car brands and most of the time their dealers approve of their tactics.

“Dealers don’t really have an issue with contributing to brand Marketing spend. Everyone appreciates that for them to succeed, and for us to succeed, we need a strong brand. Marketing isn’t the only way to get that, but it’s certainly at its core.”

“It’s when the marketing isn’t wholeheartedly agreed on or it’s not resoundingly liked by the network – that creates more issues. But you’re never going to please everyone.”

Freespee finds: 2

Re-think the business model or improve the technology solutions supporting it?

Dealerships must find a balance between protecting their existing business while finding growth in an industry that is facing disruption. In order to address the issues highlighted in the previous section, a number of solutions have been discussed by our interviewees.

Freespee finds: 3

Connecting different systems to map out the customer journey

While data silos are a common occurrence in most industries, it can cause problems especially in network reliant models like automotive.

When the data is too spread out and inconsistent because of issues such as differing technology or human error – it can be difficult to locate relevant pain points.

Car brands want to rely more on a closed-loop system to expedite the exchange of information among car buyers, dealerships and production.

Closing the data loop means creating technology that can understand every stage of the customer journey.

“Out-of-home marketing experiences as an area where there are improvements to be made. Probably going further and using stuff like Google Beacons to understand when
someone has seen an ad. It’s joining the whole journey up and then eventually seeing that they’ve landed up in a dealership.”

Creating a smooth experience online for car buyers is a priority for car brands as customers are just more agile when it comes to navigating the digital landscape. The on-the-ground interaction with dealerships must reflect these expectations.

“Because they’re coming into the dealership so informed, the traditional sales lead management process is less important. However, dealerships are becoming more
technologically advanced and integrated, data-wise.”

Bringing together dealerships and car brands as one data entity is easier said than done. Integrating new technology into an existing DMS can be a difficult task, especially for
dealerships that have been using the same system for decades.

“The car brand is usually the one who has passed the leads. By introducing dealers to new technology, trialling it, passing as much information as possible about the customer can make a big difference. Our role sure be to ensure any best practice across the network is being shared and just being a massive connector really.”

“We have to work with dealerships in order to make sure that we’re not imposing technologies on them. We understand that this is all about data integration with the
technologies. 

If manufacturers can negotiate some really healthy discounts with the technology providers, to enable the retailers to get a very cost-effective technological solution for themselves, then that might help them choose one technology over another. But fundamentally, it’s ensuring those data flows are simple, easy, frictionless and
complete.”

When asked about how new technologies can do further improve the process, one executive said: “better use of automation and artificial intelligence. Better use of much less expensive methods of follow-up.”

Car brand managers see more digitalisation on the near horizon. 

“There’ll be another era of change. It’s made it far easier to track leads, to see what’s going on. We can tell when a contact may become a customer. We can see how many times they’ve been contacted, etc. So, we can pretty much trace anything if we want to.”

 

In conclusion, as one of our interviewees put it: “The key is to always focus on what the customer actually wants, especially at that moment in time. Because, in reality, they haven’t come to the site to complete an inquiry form.”

Freespee finds: 4

Middle of the road is never the best place to be: embracing the partnership is the best way forward